Progen receives BNDESPar inflow

Progen – Projects, Management and Engineering, a family company of national capital that acts on consulting engineering, management and implementation of industrial projects, closed a deal with BNDESPar to receive a capital injection from the BNDES subsidiary. The state bank participation company will hold approximately 10% of Progen stocks. Founded in 1987, for the latter years the company has been completely controlled by the Barella family.

BNDESPar confirmed the capital injection and informed that the operation was performed by the venture capital sector of the bank. This sector’s objective is to support small and medium-sized, national capital companies, and industries considered strategic by the bank. One of the objectives is to put their stocks on the stock market.

Both the BNDESPar and the Progen have not revealed the value of the capitalization. According to what Valor estimated, the amount is around $18 million. This is the subsidiary’s first shareholding operation in a consulting engineering services company.

Progen performs consulting and projects for the mining, metallurgy, infrastructure (railway, airports, and naval construction), logistics, oil and gas industries, and other various ones, such as petrochemical and pharmaceutical. Among its clients there are big companies, such as Vale, Votorantim and Petrobras.

Eduardo Barella, son of one of the founders and executive president of Progen since 2009, told Valor that the resources will be used to expand their businesses in the country and abroad. Their plans include acquiring competitors to grow some muscles and compete with international groups.

The consulting engineering sector in the country, in later years, has been going through a process of denationalization, with acquisitions of local companies by foreign ones. One example is CNEC, from the Camargo Corrêa group, sold to the Australian Worley Parsons. SNC was acquired by the French company Lavalin. Other big competitors to Progen are Arcadis and Poyry.

Barella stated that BNDESPar participation in the company’s capital brings support to growth and to become a relevant player in the industry, within 5 years. According to him, the plan foresees that, by the end of the period, they will be prepared to make a probable public offering in the stock market.

According to Barella, the big competitors come from developed economies, and while developing economies house many companies of elevated technical capacity, they lack management and capital structure for worldwide competition. We become vulnerable in face of these competitors.

BNDESPar, with a representative in Progen’s board, demands compensation. For example, that the company adopts the management governance model, with the establishment of committees.

The venture capital area of BNDESPar relies on stakes in 35 companies. The goal is to make these companies be listed on the levels Bovespa Mais and Novo Mercado da BM&FBovespa. From this group, Nortec, Altus, Linx and Senior Solution have opened their capitals.

Barella says they have targeted many assets for acquisition: companies with complementary operation and expanding sectors. In the latest years they have acquired R. Peotta (port infrastructure), and joint ventured with the Spanish Auding Intraesa (passenger railway, roads and sanitation) and Metso (at Valpro, for paper and cellulose projects).

Last year, Progen had a gross revenue of $ 187.5 million, and they expect to repeat this value in 2013, according to Barella. The company has 2600 employees.